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Are non-compete agreements enforceable in Illinois?

Your company’s intellectual property, trade secrets and proprietary content and procedures are vital to its success. Protecting such sensitive information is paramount, even if it means requesting that any new personnel that you bring in to your business in Chicago signs a non-compete agreement. In general, such agreements place certain limitations on what an employee can and cannot do in relation to your business once they have left. The question is whether or not such agreements are enforceable.

Illinois does indeed have statutes that address non-compete agreements, yet they are limited in scope. According to the American Association of Corporate Counsel, Illinois’ Freedom to Work Act on expressly prohibits non-compete agreements when made between an employer and low-wage employees. Specifically, an employer cannot attempt to prohibit a low-wage employee from:

  • Going to work for another company for any pre-determined time period
  • Securing new employment in a specific geographic area
  • Simultaneously work for another company that operates in the same industry

For the purposes of this statute, a low-wage employee is defined as one who makes $13.00 or less per hour.

Illinois state law also prohibits employers in certain fields from placing restrictions on the career opportunities of its employees. For example, if you direct a state agency, you cannot induce or pay an employee to not bid on a state-sponsored contract. If you run a law firm, you cannot restrict outgoing attorneys from practicing law in a certain field.

Other than the limitations listed above, Illinois state courts will generally enforce non-compete agreements. Their terms, however, must be reasonable and supported by adequate consideration. You typically also must show that the need for such agreements is indeed warranted to protect your company’s interests.